Montana Minimum Wage 2026: $10.85, Indexed Yearly, No Tip Credit
Montana minimum wage is $10.85 per hour in 2026, adjusted every January by CPI. Montana allows no tip credit, meal credit, or training wage, so tipped workers get the full rate. Businesses under $110,000 in sales outside the FLSA may pay $4.00. Coverage, overtime, and an employer checklist.
The Montana minimum wage is $10.85 per hour in 2026, up from $10.55 in 2025. Montana adjusts the rate every January 1 based on the change in the Consumer Price Index from August to August, rounded to the nearest 5 cents, so the rate has risen almost every year since indexing began in 2008. Montana is one of a handful of states that allows no tip credit: tipped employees must receive the full $10.85 in cash before tips. The state also prohibits meal credits and training wages. The one exception is a $4.00 rate for businesses not covered by the federal Fair Labor Standards Act with gross annual sales of $110,000 or less.
Reviewed September 2026
Figures come from the Montana Department of Labor and Industry's state minimum wage page and the US Department of Labor's July 1, 2026 state and tipped wage tables. Montana announces the following year's rate by September 30 each year; confirm the 2027 figure with the Department of Labor and Industry before January.
Current Montana Minimum Wage
Montana's minimum wage is $10.85 per hour. The Montana Department of Labor and Industry lists the current rate at $10.85 and explains that "the minimum wage is subject to a cost-of-living adjustment based on the Consumer Price Index no later than September 30th of each year." The US Department of Labor table shows the same $10.85 for businesses with more than $110,000 in annual sales and $4.00 for smaller businesses outside federal coverage.
The $4.00 rate is narrower than it looks. The Department of Labor and Industry states that a business not covered by the FLSA "whose gross annual sales are $110,000 or less may pay $4.00 per hour," but adds that "if an individual employee is producing or moving goods between states or otherwise covered by the Fair Labor Standards Act, that employee must be paid the greater of either the federal minimum wage or Montana's minimum wage." Most businesses have some interstate commerce, so the $4.00 rate applies to very few workers in practice.
Montana Minimum Wage vs Federal Minimum Wage
| Measure | Montana (2026) | Federal (2026) | Difference |
|---|---|---|---|
| Hourly minimum wage | $10.85 | $7.25 | $3.60 |
| Tipped cash wage | $10.85 (no tip credit) | $2.13 | $8.72 |
| Maximum tip credit | $0.00 | $5.12 | Montana allows none |
| Training wage | Not allowed | $4.25 for under 20, 90 days | Montana allows none |
| Weekly pay at 40 hours | $434.00 | $290.00 | $144.00 |
| Annual pay at 2,080 hours | $22,568 | $15,080 | $7,488 |
| Last increase | January 1, 2026 | July 24, 2009 |
The tipped row is the one that surprises employers moving into Montana. A server in Billings earns $10.85 in cash for every hour plus all tips; the employer cannot count tips toward the minimum.
Tipped Minimum Wage in Montana
Montana does not permit a tip credit. The Department of Labor and Industry is explicit: "No tip credit, meal credit, or training wage is allowed under Montana's Wage & Hour Laws." The DOL tipped table lists Montana among the states requiring the full state minimum wage before tips.
The rules that follow:
- Pay every tipped employee at least $10.85 per hour in cash for every hour worked
- Tips belong to the employee; tip pooling among employees who customarily receive tips is allowed under federal rules, but managers and supervisors cannot participate
- Overtime for tipped workers is 1.5 times the regular rate, which includes the full $10.85 plus any non-discretionary bonuses
- Do not deduct for meals provided; Montana does not allow a meal credit either
Montana Minimum Wage Increase Schedule
Montana voters approved indexing in 2006 and the first adjusted rate took effect in 2008. The rate rises when the CPI rises and cannot fall.
| Effective date | Rate | Basis |
|---|---|---|
| January 1, 2021 | $8.75 | CPI adjustment |
| January 1, 2022 | $9.20 | CPI adjustment |
| January 1, 2023 | $9.95 | CPI adjustment |
| January 1, 2024 | $10.30 | CPI adjustment |
| January 1, 2025 | $10.55 | CPI adjustment |
| January 1, 2026 | $10.85 | CPI adjustment |
| January 1, 2027 | To be announced by September 30, 2026 | CPI, August 2025 to August 2026 |
The 2025 and 2026 figures are from the Department of Labor and Industry's current page and its 2026 determination; the earlier rates are the Department's prior annual determinations. The formula uses the CPI increase "from August of the preceding year to August of the year in which the calculation is made," rounded to the nearest 5 cents.
Local Minimum Wages in Montana
None. Montana has no local minimum wage ordinances, so Billings, Missoula, Great Falls, Bozeman, and Helena all use the state rate. Neighboring Idaho, Wyoming, and the Dakotas range from $7.25 (Idaho, Wyoming, North Dakota) to $11.85 (South Dakota), so Montana sits in the middle of the region.
Who Is Covered and Who Is Exempt
Montana's Wage and Hour Act covers most employees. Exemptions include:
- Bona fide executive, administrative, and professional employees who meet the duties tests
- Certain agricultural workers and ranch hands
- Some students in work-study or vocational programs
- Immediate family members employed by a family business
- Employees of businesses with $110,000 or less in gross annual sales that are not covered by the FLSA, who may be paid $4.00
For classification, see exempt vs non-exempt employees. A full-time minimum wage worker earns $22,568, below the $35,568 federal salary threshold, so minimum wage staff cannot be exempt.
Overtime and the Minimum Wage
Montana requires overtime at 1.5 times the regular rate after 40 hours in a workweek, with no daily overtime for most employees. A 45-hour week at $10.85 pays:
| Component | Hours | Rate | Pay |
|---|---|---|---|
| Regular | 40 | $10.85 | $434.00 |
| Overtime | 5 | $16.28 | $81.38 |
| Total | 45 | $515.38 |
See overtime pay laws by state and the overtime calculator.
What a Minimum Wage Worker Earns in Montana
| Period | Hours | At $10.85 | At $10.55 (2025, for comparison) |
|---|---|---|---|
| Week | 40 | $434.00 | $422.00 |
| Month | 173.33 | $1,880.63 | $1,828.63 |
| Year | 2,080 | $22,568 | $21,944 |
Gross figures before deductions. Use the salary to hourly calculator for other rates and see gross pay for withholdings.
Employer Compliance Checklist
- Pay $10.85 to everyone, including tipped employees, with no tip, meal, or training credits.
- Watch for the September 30 announcement of the 2027 rate and update payroll for January 1.
- Do not use the $4.00 rate unless the business is both outside FLSA coverage and at or below $110,000 in annual sales, and the employee has no interstate commerce duties.
- Pay overtime after 40 hours at 1.5 times the regular rate.
- Post the Montana minimum wage poster for the current year.
- Keep hour records with a time card calculator or automated tracking to support overtime claims and annual rate changes.
For other states, see minimum wage by state.
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How Montana's Annual Adjustment Is Calculated
The Department of Labor and Industry compares the Consumer Price Index for August of the current year with August of the previous year, applies the percentage change to the current minimum wage, and rounds to the nearest 5 cents. The result is announced by September 30 and takes effect January 1. The statute does not allow the rate to fall if the index declines.
As an illustration only: if the CPI rose 2.5 percent between August 2025 and August 2026, the calculation would be $10.85 multiplied by 1.025, which is $11.12, rounded to $11.10. The actual 2027 rate depends on the published index and the Department's determination, so employers should update payroll from the official announcement rather than from their own estimate.
Common Minimum Wage Mistakes in Montana
Montana's no-credit rule and annual indexing are the two sources of most errors:
- Taking a tip credit. Employers moving from neighboring states apply a tip credit out of habit. Montana allows none; every tipped hour must be paid at the full $10.85 in cash.
- Deducting for meals. Montana prohibits meal credits as well as tip credits.
- Paying a training wage to new hires or teenagers. Not allowed under Montana law.
- Using the $4.00 rate too broadly. It requires a business outside FLSA coverage with $110,000 or less in annual sales and an employee with no interstate commerce duties. Few businesses qualify.
- Missing the January 1 change. The rate has risen every January since 2021. The Department of Labor and Industry announces the new figure by September 30.
- Rounding the wrong way. The state rounds the adjusted rate to the nearest 5 cents; use the published figure, not your own CPI calculation.
Frequently Asked Questions
What is the minimum wage in Montana in 2026?
$10.85 per hour, effective January 1, 2026.
Will Montana's minimum wage go up in 2027?
If the CPI rose from August 2025 to August 2026, yes. The Department of Labor and Industry announces the adjusted rate by September 30, 2026.
Can Montana employers take a tip credit?
No. Tipped employees must receive the full $10.85 in cash before tips.
Does Montana have a training wage?
No. Training wages are not allowed under Montana's wage and hour laws.
Who can pay the $4.00 minimum wage in Montana?
Only businesses not covered by the federal FLSA with gross annual sales of $110,000 or less, and only for employees not engaged in interstate commerce.
Does Missoula or Billings have a higher minimum wage?
No. Montana has no local minimum wages.
How much is Montana minimum wage per year?
$22,568 before taxes at 2,080 hours.
Does Montana require daily overtime?
No. Overtime is owed after 40 hours in a workweek.